Revolut staff and early investors have offloaded almost $1 billion (€951m) of stock since August, after the fintech’s UK banking licence galvanised support from big financial institutions and secured it a $45 billion (€42.8b) valuation.
The London-based group has twice extended its so-called secondary share sale, which first allowed only current employees to sell stock, to enable some of its early backers and former staff to cash in parts of their holdings.
The sale, which launched a month after the award of Revolut’s long-awaited UK banking licence, attracted a crop of institutional investors, including Abu Dhabi sovereign investor Mubadala which took a stake for the first time.
The company’s founder and chief executive Nik Storonsky netted between $200 million and $300 million in the first round, the Financial Times previously reported.
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Early venture capital investors sold about $500 million worth of stock in the second round of the sale, people familiar with the matter said. In total, the share sales are now set to surpass $1 billion, they added. Revolut declined to comment.
The size of the sales, which enable staff and early investors to crystallise some of their paper wealth, underlines the ascent of Revolut from a fintech upstart to a serious banking challenger as well as the consequences of companies staying private for longer.
Big secondary share sales have become a more common way to monetise investments in companies and capitalise on the surging value of successful start-ups.
Stripe, the privately owned, Irish-founded payments group, in February, allowed employees to cash out about $1 billion of stock at a $65 billion valuation by selling to institutional investors including venture firm Sequoia Capital.
Sequoia has since bought up more shares in the Dublin and San Francisco-headquartered company through further secondary sales that have bumped Stripe’s valuation up to $70 billion.
Revolut spent more than three years in limbo waiting for its UK banking licence, and suffered a series of mishaps including a qualified audit in its 2021 accounts that constrained its appeal to investors.
The approval of its licence application this summer paved the way for a rush of new investors looking to back the fast-growing financial app. Wealthy clients of Goldman Sachs’ private bank were among those who joined its shareholder register in the second round of the share sale this year.
Revolut has taken a cut of the proceeds from some of the share sales. Former staff have had to pay a 2 per cent transaction fee to sell, higher than the 1.5 per cent fee levied in a 2021 fundraise.
The fee was designed to cover the costs to the company of running the share sale and Revolut had not made a profit on the transactions, one person familiar with the matter said. – Copyright The Financial Times Limited 2024
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